Finland to Drop Tax on Ice Cream and Candy

Finnish regulators have announced that they plan to eliminate a tax on ice cream and confectionery at the beginning of 2017. Finland’s Cabinet Committee on Economic Policy announced the change after the European Commission said the tax unfairly favors Finnish producers of sweets because imported ice cream and candy are charged the tax on top of import duties. The change came about as a result of two complaints.

The tax on sweets was introduced to reduce consumption of sugar. The measure was in effect from 1926 to 1999 and was reintroduced in 2011. A rate of 0.95 euro is charged for every kilo of confectionery or liter of ice cream, which are considered to be equivalent.

It is estimated that Finland has collected 109 million euros ($121.6 million) in revenue from the tax in 2015. That total consisted of about 80 million euros for confectionery and 30 million euros for ice cream.

The Taxpayer Association of Finland expects the end of the tax on sweets to lower the price of ice cream. However, it is not clear whether those savings will be passed on to consumers.

A tax on sugary drinks will continue to be collected. Soft drinks, a category that includes lemonade, energy drinks, flavored water, juice, and fruit or vegetable beverages, have been taxed since 1940. The soft drink tax raised 147 million euros this year.

There may be a problem with including soya drinks because the Commission considers them similar to milk. The beverages may be included in the future.